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22–683 PDF 2005

S. HRG. 109–210

ROUNDTABLE DISCUSSION: PREPARING A

NATIONAL BIODEFENSE: S. 975

HEARING

BEFORE THE

SUBCOMMITTEE ON BIOTERRORISM AND PUBLIC 

HEALTH PREPAREDNESS

OF THE

COMMITTEE ON HEALTH, EDUCATION, 

LABOR, AND PENSIONS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

ON

EXAMINING S. 975, TO PROVIDE INCENTIVES TO INCREASE RESEARCH 

BY PRIVATE SECTOR ENTITIES TO DEVELOP MEDICAL COUNTERMEASURES TO PREVENT, DETECT, IDENTIFY, CONTAIN, AND TREAT 

ILLNESSES, INCLUDING THOSE ASSOCIATED WITH BIOLOGICAL, 

CHEMICAL, NUCLEAR, OR RADIOLOGICAL WEAPONS ATTACK OR AN 

INFECTIOUS DISEASE OUTBREAK

JULY 21, 2005

Printed for the use of the Committee on Health, Education, Labor, and Pensions

(

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS 

MICHAEL B. ENZI, Wyoming, Chairman 

JUDD GREGG, New Hampshire 

BILL FRIST, Tennessee 

LAMAR ALEXANDER, Tennessee 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

MIKE DEWINE, Ohio 

JOHN ENSIGN, Nevada 

ORRIN G. HATCH, Utah 

JEFF SESSIONS, Alabama 

PAT ROBERTS, Kansas 

EDWARD M. KENNEDY, Massachusetts 

CHRISTOPHER J. DODD, Connecticut 

TOM HARKIN, Iowa 

BARBARA A. MIKULSKI, Maryland 

JAMES M. JEFFORDS (I), Vermont 

JEFF BINGAMAN, New Mexico 

PATTY MURRAY, Washington 

JACK REED, Rhode Island 

HILLARY RODHAM CLINTON, New York 

KATHERINE BRUNETT MCGUIRE, Staff Director 

J. MICHAEL MYERS, Minority Staff Director and Chief Counsel 

SUBCOMMITTEE ON BIOTERRORISM AND PUBLIC HEALTH PREPAREDNESS

RICHARD BURR, North Carolina, Chairman 

JUDD GREGG, New Hampshire 

BILL FRIST, Tennessee 

LAMAR ALEXANDER, Tennessee 

MIKE DEWINE, Ohio 

JOHN ENSIGN, Nevada 

ORRIN G. HATCH, Utah 

PAT ROBERTS, Kansas 

MICHAEL B. ENZI, Wyoming (ex officio) 

EDWARD M. KENNEDY, Massachusetts 

CHRISTOPHER J. DODD, Connecticut 

TOM HARKIN, Iowa 

BARBARA A. MIKULSKI, Maryland 

JEFF BINGAMAN, New Mexico 

PATTY MURRAY, Washington 

JACK REED, Rhode Island 

ROBERT KADLEC, Staff Director 

DAVID C. BOWEN, Minority Staff Director 

(II) 

C O N T E N T S 

STATEMENTS

THURSDAY, JULY 21, 2005

Page 

Burr, Richard, Chairman, Subcommittee on Bioterrorism and Public Health 

Preparedness, opening statement ....................................................................... 1

Lieberman, Joseph I., a U.S. Senator from the State of Connecticut ................. 2

Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah, opening statement ...................................................................................................................... 5

Schumer, Hon. Charles E., a U.S. Senator from the State of New York ............ 9

ADDITIONAL INFORMATION 

Statements, articles, publications, letters, etc.: 

Kennedy, Hon. Edward M., a U.S. Senator from the State of Massachusetts, prepared statement ............................................................................. 19

(III) 

(1)

ROUNDTABLE DISCUSSION: PREPARING A 

NATIONAL BIODEFENSE: S. 975

THURSDAY, JULY 21, 2005

U.S. SENATE, 

SUBCOMMITTEE ON BIOTERRORISM AND PUBLIC HEALTH

PREPAREDNESS, COMMITTEE ON HEALTH, EDUCATION, LABOR, 

AND PENSIONS, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10:09 a.m., in room 

430, Dirksen Senate Office Building, Senator Burr, chairman of the 

subcommittee, presiding. 

Present: Senators Burr, Hatch, Lieberman, and Schumer. 

OPENING STATEMENT OF SENATOR BURR

Senator BURR. This hearing will come to order. Senator 

Lieberman, welcome. 

Senator LIEBERMAN. Thank you. 

Senator BURR. We also welcome Senators Hatch and Schumer. 

At this time I would ask unanimous consent that all members’ 

statements be included in the record, as well as the full statements 

of today’s witnesses be included in the record, and without objection, so ordered. 

Again, I would like to thank you and our colleagues, Senator 

Lieberman, for being here. 

This is the second formal Roundtable that we have had, and I 

am hopeful that we are growing close to the end of a very long 

process, but one that was needed greatly. 

As we begin to examine all the aspects of S. 975, we certainly 

have the ability to tap the talents and the knowledge of two people 

who have been extremely engaged in the process, Senator Hatch 

and Senator Lieberman. For scheduling reasons, Senator Gregg is 

unable to join us today, but as we stated when we started this 

process, we had been charged by Senator Enzi to look at all the 

pieces of legislation that had been introduced as it related specifically to BioShield, to try to figure out what we collectively have 

learned over the past several years, and to try to make sure that 

we incorporated all the great ideas that existed not just on the Hill 

but around the country. 

I can tell you that we have exhausted every opportunity to reach 

out in a public venue, in a private venue, to individuals that we 

thought had something to contribute. I truly believe that at the end 

of this process we will have left no stone unturned to try to learn 

something that possibly we did not know. I am convinced that as 

2

we go through the final pieces, and that is, trying to assemble a 

piece of legislation, the same individuals will be included in that 

process. This is not one that will be written in the dark of night 

or in a closed room. It is one that will be written based upon the 

input of experts, and as we move along that process, I believe that 

we will have a bill that addresses the concerns that are expressed 

in S. 975, the concerns that are expressed by people on the front 

line, the concerns that every American has about their security and 

the threat that is out there. 

With that, I want to thank Chairman Enzi and Senator Kennedy. 

Without their cooperation we would not have been able to go 

through this process, and they have been extremely helpful. Both 

are unable to be with us today. 

For us to move to the next step, it is absolutely vital that we get 

the insight from you, Senator Lieberman and Senator Hatch, as it 

relates to the specific pieces of S. 975 that you have focused on and 

feel passionate about, so that we understand exactly the reasons 

these things may be assembled or worded in the way that they are. 

I know that you said that you would yield to Senator Hatch first 

because your schedule accommodated. Since he is not here, if we 

can, we will go ahead with you and we will work out whatever we 

need to with Orrin when he comes. 

STATEMENT OF JOSEPH I. LIEBERMAN, A U.S. SENATOR FROM 

THE STATE OF CONNECTICUT 

Senator LIEBERMAN. Thanks very much, Chairman Burr, and 

thanks for inviting Senator Hatch and me to testify about some of 

the key features of S. 975, which he and Senator Brownback and 

I have introduced, but thanks really more specifically for the sense 

of urgent leadership you bring to this matter which is urgent; and 

the question which is how do we best and most quickly protect our 

people from the bioterrorist threat and from the naturally occurring threat of infectious diseases? 

This is no casual matter. You know, you are new here, and I 

greatly appreciate that you have focused on this and that you have 

done it with the support of Senator Enzi and Senator Kennedy because, believe me, if there was ever an occasion for bipartisan cooperation, this is it, because we are talking about truly the national defense, national security, national well-being of our people. 

I do want to say that my own feeling is that the best way to combat the threat of bioterrorism is to utilize one of America’s greatest 

strengths, which is our innovational and entrepreneurial talent. 

The BioShield law that was enacted last year takes the first step, 

but unfortunately, my conclusion is, without additional reforms, 

companies are not likely to risk their own capital to fund the necessary research, leaving us with a Government funding model that 

will be expensive, and I am afraid will not produce the results we 

need. 

The concepts in our legislation, S. 975, including tax, intellectual 

property and liability reforms, we are confident will give us important additional tools to enlist the industry in this vital research. 

Let me try to briefly elaborate. 

BioShield II calls on this innovational spirit that I have talked 

about. We need to get companies and investors to commit their reVerDate 0ct 09 2002 10:44 Jan 10, 2006 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 S:\DOCS\22683.TXT SLABOR3 PsN: DENISE
3

sources to this effort, and since intentional, maliciously infected infectious disease and naturally occurring infectious disease may 

have equally devastating effects, the incentives that we are proposing are extended to countermeasures to nature’s threats as well. 

And I include by example pandemic flu, SARS, malaria, and ebola 

virus. 

Just as we in the United States seek to protect ourselves from 

new infectious disease threats, clearly, less developed nations are 

trying to eliminate scourges that have restricted their social and 

economic development for too long now, and BioShield II seeks to 

inspire innovation on behalf of neglected markets worldwide. 

I am glad to see Senator Hatch here. If you have a minute, I will 

just say a few more words about our bill, and then yield to my very 

distinguished colleague. 

BioShield II proposes that through the mechanism of a contract 

for a new product with the Department of HHS, companies receive 

a menu of tax incentives, some for small and others for medium 

and large companies. BioShield II, again, through this contract 

method, provides a menu of intellectual property incentives and options that may be appropriate motivators for start-up midstream or 

successful enterprises to take on these high-risk assignments. 

And finally, through the HHS contract, companies may partake, 

under our legislation, of a selection of liability protections as incentives to the companies to get them involved. We also provide grants 

to assist small companies with promising technologies that need 

support while undergoing regulatory approval of a product, and we 

address public health preparedness in the case of a national medical emergency by consolidating authority at DHS. 

Mr. Chairman, the intellectual property provisions that I mentioned above seem to be drawing the most interest, and frankly, 

the most fire, so I would like to briefly address this concern. 

One option we have here, which is to try again urgently to draw 

the enormous capabilities of our biotech and pharmaceutical industry into providing countermeasures for both maliciously imposed 

bioterrorist infectious attacks and naturally occurring ones, is to 

enact what we are calling a patent bonus that a company could 

apply to a patent in its portfolio in exchange for achieving the goal 

we have set, which is to protect us from these terrible threats. 

Obviously, we should not burden consumers with higher prices 

for patented products any longer than necessary, but in this legislation, we are raising the question of whether it is necessary to 

enact the bonus in order to establish a viable biodefense industry. 

The fact is that the established pharmaceutical companies have a 

proven record of success in running clinical trials and gaining regulatory approval for their products, which I believe are the safest 

and most effective in the world. I understand—and opponents of 

this provision of our measure have said there might be some increase in the cost of prescription drugs if a patent were extended 

for some period of time—but I think we have to understand exactly 

what we are proposing and the trade-off that we are suggesting. 

If we need a particular drug, a countermeasure to protect ourselves against a bioterror attack or to cure AIDS, or another deadly 

pathogen, then this cost should be weighed against the devastating 

4

cost if we fail to secure and develop needed medical countermeasures. 

Let me give the argument for how this might work in the world 

we know today. AIDS is costing America $18 billion a year to treat, 

to identify, all the consequences of it. In fact, the United States is 

now spending $5 billion additional dollars a year in aid to foreign 

countries to treat their citizens suffering from AIDS. To state this 

as a balance, would that be a fair investment for a cure or vaccine 

that would render that annual expenditure entirely unnecessary? 

In other words, if in fact the patent bonus results in some prescription drugs costing a little more than they otherwise would for some 

period of time, you have got to weigh that against the billions of 

dollars and incalculable benefits from saving people from the pain 

of AIDS or other illnesses we would cure. Imagine how much suffering would be ended, as well as lives and money saved. 

You have to ask, what is it worth to generate a platform technology that would promptly generate vaccines against emerging viruses? What would we spend for new resistance-free antibiotics or 

truly effective antiviral medications? Each of these discoveries I 

think shares something in common. They are not products industry 

seems to be willing to develop right now because their profit is not 

assured, there is not a clear market, and the cost of product liability or market failure are too high. These companies are not fulfilling the requirements of their shareholders as they see it by participating in these programs to the extent we need them to in today’s economic environment. 

I want to finally stress this. Under S. 975, BioShield II, these 

patent extensions, either for newly developed drugs or for existing 

patents in a company’s portfolio, are selectively available only for 

a limited time, up to 2 years at the discretion of the Secretary of 

DHHS, and administered at his discretion, and they are not automatic, which is to say they are not awarded unless the patent holder delivers to countermeasure. At some point the Secretary of DHS 

will say, OK, what you are working on with regard to a countermeasure for a bioterrorist, an anthrax attack or AIDS or the ebola 

virus or any number of other threats we face, pandemic flu, it looks 

good enough that we are going to agree that if it works, we will 

give you this patent extension for 6 months or 3 months, or maybe 

if it is big enough, 2 years. But you only get the patent bonus if 

the countermeasure, an effective countermeasure is delivered. 

Those incentives do not apply to existing entities or patents purchased from any other company after the contract is enforced. 

I am going to yield to my colleagues, but I wanted to directly 

deal with what clearly seems to be the most controversial part of 

the proposal Senators Hatch, Brownback, and I have made. 

Again, Senator Burr, you are a new Senator, but I think you 

have the potential to make an enormous contribution on a matter 

of the most urgent national interest. I thank you for your leadership and I look forward to working with you. And with your permission, I would yield to Senator Hatch. 

Senator BURR. Absolutely. Welcome, Senator. 

5

OPENING STATEMENT OF SENATOR HATCH

Senator HATCH. Thank you, Senator Burr. I just joined Senator 

Lieberman in praising you and commending you for taking the lead 

in this area because you have been very determined, and I think 

have really been moving forth in ways that are very much appreciated by me and by Senator Lieberman and others as well. Now, 

I appreciate also Chairman Enzi’s dedication to developing the best 

legislation possible in the area of public health preparedness. 

My longstanding concern in this area of bioterrorism has been 

manifested in this longstanding partnership with Senator 

Lieberman. We cosponsored bills in the last three Congresses, including our current BioShield II bill, S. 975. So I would also like 

to take time to acknowledge the contributions of our new third primary partner in this endeavor, Senator Brownback. As you know, 

I really appreciate working with Senator Lieberman. He is just a 

terrific Senator and a person who really takes these matters very 

seriously, and I am grateful to him, and others as well. 

I appreciate my good friend, Senator Schumer over there. He 

picks on me all the time, but other than that—[Laughter.] 

Senator LIEBERMAN. Senator Hatch, he is going to do it again 

today. 

Senator HATCH. Is that right? 

Senator LIEBERMAN. Yes. He is going to pick on both of us. 

Senator SCHUMER. Could the committee pass out Kleenex to everybody, please? [Laughter.] 

Senator HATCH. As you know, I have a difficult time defending 

myself. 

Senator SCHUMER. Oh, yes, I see that. 

Senator HATCH. I love Chuck, but he is a pain in the neck sometimes. 

Senator SCHUMER. And by the way, that is an improvement on 

what he said a few years ago. [Laughter.] 

Senator HATCH. They have been resurrecting that, much to my 

chagrin, because it was all done in good sport, and you were a very 

good sport about it, in spite of the dumb questions. [Laughter.] I 

could not resist. I apologize. 

Recently I have been heartened to the call to action so eloquently 

stated in a major address at Harvard by Senate Majority Leader 

Frist. Now is the time to couple words with action. 

Warning of the threat is critical, but we must take tangible steps 

to mitigate this great and growing danger while we can. Both Senator Lieberman and I have long recognized that the only sure way 

for the Senate to pass comprehensive, meaningful bioterrorism legislation is for the Majority Leader to call upon all of the relevant 

committees of jurisdiction to report legislation by a certain date. 

While we applaud the efforts past and present of the HELP Committee, especially the efforts of Senators Gregg, Enzi, Frist, Burr, 

Lieberman, Brownback, and I think that we need the active involvement of the Finance, Judiciary, Homeland Security and Agriculture Committees, among the others that have jurisdiction of 

matters we include in our bill, S. 975. I think this is also the case 

with the Gregg bill, S. 3. In fact, we just passed the renewal of the 

6

PATRIOT Act out of the Judiciary Committee before I came up 

here. 

I have taken note of, and have been disappointed to see, that by 

and large the private sector pharmaceutical industry has largely 

voted with their feet or at least their pocketbooks, and chosen not 

fully to involve themselves in the search for medical countermeasures to bioterror agents and emerging infectious diseases. The 

potential product liability exposure alone creates a powerful disincentive to private sector involvement in this field. It is no accident that the American vaccine industry has nearly vanished in 

the wake of enormous product liability concerns, and likely fueled 

by sometimes overzealous and outright greedy trial lawyers. 

I am also disappointed to sense an air of complacency among too 

many on the Hill and in the administration because the status quo 

is simply unacceptable. The hard truth is that in the summer of 

2000, the Defense Science Board found that we had only one of the 

57 diagnostics, drugs and vaccines most needed to respond to a bioterror attack. We now have only 2 of the 57 countermeasures, and 

this list does not include medicines for genetically engineered or 

otherwise exotic bioterror agents. This is not only unacceptable, it 

is potentially very dangerous and deadly. 

Unfortunately, it appears it may well take another terrorist 

threat similar to the anthrax attacks that many people in this 

room experienced, or a direct threat from an illness like SARS or 

avian flu before sweeping reforms are adopted by Congress. I think 

that is pathetic. The Lieberman-Hatch-Brownback BioShield II legislation, S. 975, was developed and refined with input from literally 

dozens and dozens of experts over a long period of time. It has been 

criticized by some as being too broad, too sweeping, and too generous in its incentives. Those critics, in my view, are misguided. 

This is not a threat we can hope to abate by nibbling around the 

edges. 

BioShield I should have taught us that. We have seen what little 

result we got from a change in a single area. To move from a position of apathy and unpreparedness to a positive or a posture of 

strength and vigilance will require more than a minor change here 

or there. That is why S. 975 contains 29 titles and 360 pages. 

It is a comprehensive and aggressive strategy of incentives for 

the development of effective bioterrorism and infectious disease 

medical countermeasures, as well as addressing other critical 

issues like command and control, protection of our food and water 

supplies, and workforce issues. 

To those who focus upon and decry certain features of the intellectual property incentive, such as the wild card patent extension, 

I ask you, how much would you be willing to pay for preventive 

measures for a threat of agents like the ebola virus? 

Furthermore, the cost of these proposed incentives is trivial compared to the cost of bioterror attack or infectious disease outbreak. 

Moreover, the research that will be done by companies seeking to 

earn some of these incentives will likely drive all medical research 

forward and give rise to many ancillary medical benefits for Americans. 

I do not believe that it is possible to understate that a crisis is 

looming, or crises are looming. Although Secretary Leavitt at 

7

Health and Human Services, and Secretary Chertoff at Homeland 

Security are working tirelessly to improve our readiness, their 

hands are tied by many of the problems which are addressed in S. 

975, that it is not only intentional threats with which we must concern ourselves. Naturally occurring and emerging disease may 

prove even more dangerous. People are already suffering terribly 

from dreadful diseases such as AIDS, tuberculosis, antibiotic resistant organisms and hepatitis. These diseases kill millions each year, 

and with diseases like SARS and the avian flu, there is evidence 

that things will only get worse unless we take steps to stop them. 

We need to establish biodefense, infectious disease and vaccine 

industries that can develop new diagnostics and therapeutics as 

threats evolve. We must develop the capabilities to quickly respond 

to new threats, and to do that, we must remove obstacles to this 

research. 

We also need to broaden the responsibility for developing these 

countermeasures beyond the Government by increasing private sector incentives. That is where many of the best and brightest work 

to develop new drugs. We should let industry do what it does best, 

and that is innovate. And we should make sure that appropriate 

rewards exist for those who succeed. 

Both S. 975 and S. 3 propose bold and innovative incentives to 

create a viable market for these medical countermeasures. These 

bills shift the cost and risk of development of these countermeasures to the biotech and pharmaceutical sector in exchange for 

substantial and appropriate rewards if and only if these companies 

successfully develop the countermeasures we need to defend ourselves against an attack or outbreak. Companies will be rewarded 

for success. This is not a Government subsidy for ongoing research. 

BioShield II is premised on the notion that we should use the 

biopharma industry to our national advantage. 

It is true that our bill contains aggressive R&D tax provisions, 

strong liability protections, and several IP incentives, but we will 

not be able to fill the medicine chest with the 57-plus required 

countermeasures on the cheap. Biopharma industry representatives 

have repeatedly stated that only if we enact all of the proposed incentives in S. 975, without dilution, do we have the best chance 

that industry will venture into this area. 

We are in the enviable position of being able to learn from the 

experiences of Canada and China. They paid an extraordinarily 

high price for their experiences, but they have hopefully learned 

from their pain. We must not look on in a disinterested fashion and 

argue that it could never happen to us. Complacency in this area 

has fatal results. Developing medicines for these emerging pathogens is perhaps the most important step we as Members of Congress can take to protect our citizens. This is as fundamental to our 

Nation’s security as are our law enforcement personnel, metal detectors at airports and a strong well-equipped military. The magnitude of the threat justifies aggressive and innovative incentives. 

And I have mentioned that the spinoffs that can come from it are 

absolutely startling. When we did that little, wee, tiny orphan drug 

bill, with a cost of $14 or $15 million, it gave incentives to develop 

orphan drugs for population groups that are less than 200,000 people. At that time I think there were one or two orphan drugs availVerDate 0ct 09 2002 10:44 Jan 10, 2006 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 S:\DOCS\22683.TXT SLABOR3 PsN: DENISE
8

able and nobody was trying to find answers to these people’s difficulties. 

Because we did that little bill, gave minimum of incentives, put 

some prestige in cooperation under that bill, now we have upwards 

of 300 orphan drugs being developed; and they found by developing 

the orphan drugs for the benefit of population groups of 200,000 or 

less, that they have had spinoffs that have turned out to be multibillion dollar spinoffs. And, frankly, they have had research that 

has gone far beyond because of the incentives we provided in a very 

modest bill. 

BioShield II, S. 975 also seeks to build and maintain a national 

public health infrastructure to meet future health-related threats, 

be they conventional weapons like the bombs in the London transit 

system, biological threats like the anthrax attacks, or emerging diseases like ebola. One key issue is command and control. To be 

blunt, today, no one is clearly in command of our public health or 

medical systems in the event of an attack or outbreak, and that 

issue has to be resolved. 

Our bill, S. 975, also focuses on the need to protect our Nation’s 

food and water supply from bioterror and infectious disease 

threats. My home State of Utah is a rural State, and I appreciate 

the importance that agriculture plays for both the physical and economic health of this Nation. People often think of biological threats 

as something more for city dwellers to fear, but people in the country are no better off, particularly if the threat does not strike initially at humans. Hoof and mouth disease, to name just one disease, could devastate ranchers and families and farms. Many of the 

medical conditions we worry about can affect animals as well as 

humans. Any student of history knows that medieval chronicles of 

plague outbreaks often describe the disease’s devastating effects on 

the animal as well as the human population. 

Over half of the infectious disease pathogens we fear today, including avian flu, SARS, ebola, Marburg, malaria, Chagas, schistosomiasis, hantavirus and Lyme disease, West Nile virus, affect 

both humans and animals. 

For this reason we must prepare ourselves for threats to our agriculture as well as to our people. 

I know that to some it is disturbing that I am talking about the 

literal destruction of civilization when I describe these threats, but 

in fact, I am. There is a reason that pestilence is generally considered to be one of the four Horsemen of the Apocalypse, because disease can cause massive terror and destabilize entire nations. 

We have been given an opportunity to prepare ourselves to ensure that our Nation and our citizens are as well-positioned as possible to face any medical threats, but this window of opportunity, 

in my opinion, is closing. Time is slipping away, and I join with my 

colleagues in urging you to move forward and as quickly and boldly 

as we can. The stakes are truly that high. 

There are a hundred reasons why S. 975 can be criticized as 

going too far, but the day after the next bioterrorist attack of natural disease outbreak, I bet there will be 535 Members of Congress 

who will be thinking and saying that we did not go fast or far 

enough, and I do not want to have to reach that position. 

9

Let me just close again by thanking you personally, Senator 

Burr. I agree with Senator Lieberman, you are relatively new in 

the Senate, but you are a serious, reflective, intelligent man who 

has grabbed this ball, and has spent the hours and hours of time, 

you and your staff, trying to understand this issue, trying to push 

it forward. And I, just for one, want to pay my tribute to you and 

tell you how much I personally appreciate you as a leader in this 

area. I think you are doing a terrific job, and I just want you to 

know that all of us who are really concerned about this are wishing 

for your success, and we intend to help you to have success in this 

area. I just want to express my gratitude to you, and gratitude to 

my two staffers. 

And again, I apologize to my dear friend, Senator Schumer for 

taking this long, and also Senator Lieberman, but usually it is 

Schumer who takes too long. 

Senator SCHUMER. You started off on a pretty good track, Orrin. 

[Laughter.] 

Senator BURR. Senator, I thank you for your comments. I think 

it is safe to say that I share the urgency that both you and Senator 

Lieberman, as well as others, have on this issue, and the wonderful 

thing is that we did not start at ground zero in the process because 

of really the spade work that has been done by both of you and others—Senator Gregg, the interest that Senator Schumer has had in 

this, Senator Frist has contributed greatly. 

Senator HATCH. Mr. Chairman, will you forgive me for having to 

leave? I have got U.S. Supreme Court-itis on my plate today. 

Senator BURR. As long as we can keep Senator Schumer here 

and leave you out there without him, we are in good shape. 

[Laughter.] 

Senator HATCH. Keep him here as long as you can and ask plenty of questions. 

Senator LIEBERMAN. I do want to reassure Senator Hatch that 

there are countermeasures to U.S. Supreme Court-itis. [Laughter.] 

Senator BURR. With that, Senator Schumer. 

Senator SCHUMER. Why don’t you say that into the microphone? 

[Laughter.] 

Senator HATCH. Schumer is the best. 

Senator SCHUMER. Now, don’t say—no, no, no. [Laughter.] 

Sometimes, Orrin, I think—and this is an ultimate compliment 

from me. Sometimes I think you have a little Brooklyn in you. 

[Laughter.] 

Senator LIEBERMAN. We promise not to mention that in Utah. 

STATEMENT OF CHARLES E. SCHUMER, A U.S. SENATOR FROM 

THE STATE OF NEW YORK 

Senator SCHUMER. Thank you, Mr. Chairman, and I appreciate 

the opportunity. I will try to be brief here, particularly because 

Orrin had such a full statement that covered everything several 

times. 

Anyway, I want to thank both Senator Hatch and Senator 

Lieberman for bringing their ideas to the table, and I could not 

agree more with the problem and the need to move quickly. That 

is extremely important. We are not doing enough. We must. And 

10

the efforts of Senator Hatch, Senator Lieberman, yourself, and 

many others who have been involved are terrific. 

But the need to move quickly and strongly does not mean that 

you let everything go. It does not mean that anything that puts the 

name BioShield on it is good. And I am worried that the proposal 

here will be regarded, should it pass, or could be regarded as a 

boondoggle that helped the pharmaceutical industry more than it 

helped BioShield and more than it helped protect us from bioterrorism. And I hope that things can be crafted so that the efforts 

we put into encouraging pharmaceutical companies to get involved 

in this issue are first directed at real efforts, not at things they 

would be doing already; and, second, that the amount of compensation we give them is consummate with the amount of effort they 

are putting in. And that is the problem with this bill. 

And, finally, at a time when drug prices are a huge issue, who 

are we making pay for this? Purchasers of drug prices. It is not the 

Government. If you went to an economist, they would say, okay, 

you believe in BioShield and you need to help the pharmaceutical 

industry with economic incentives, the Government should pay for 

it. But we are going to choose particular citizens who desperately 

need a particular drug to subsidize it. Now, that may be the 

scheme, but if you are going to do that, you ought to be very careful. 

So let me just get briefly to the problems I have. The first and 

most egregious problem is the wild card patent extension. It is a 

reward available to drug companies which may be as many as 8 

years away from completing work on a countermeasure, and it allows companies to extend one patent for up to 2 years. The patent 

does not have to be related to the countermeasure. My good friend, 

Orrin Hatch, mentioned orphan drugs. Those are great. The money 

that was paid went into the drug itself. They weren’t to unrelated 

incentives. But this is any drug the company can make, they can 

choose it. And then, the amount of compensation they would get is 

totally unrelated to the countermeasure. 

So Merck, for instance, earned $4.5 billion on Zocor. Merck could 

get a 2-year patent extension worth $9 billion, which could be in 

compensation for a countermeasure that might be in the tens of 

millions of dollars. Who would make such a deal? Who would give 

Merck a 2,000-percent return? 

Now, the answer is the Secretary of HHS has the discretion. 

Well, smell the coffee, my colleagues. The Secretary of HHS has 

not been a very good guardian of keeping drug prices low. Just look 

at the prescription drug bill that was passed. Joe and I voted 

against it. You were not here, Senator Burr. But it had a $200 billion giveaway. In fact, to help the pharmaceutical industries, the 

prescription drug bill that the President proposed became such a 

pallid compromise that no one is happy with it. Why are we going 

to repeat that? And it was the Secretary of HHS who was fully supporting it. 

So I do not have much faith in giving unmitigated discretion to 

the Secretary of HHS. Smart legislation would put limits, would 

not let Merck choose Zocor for a countermeasure that might only 

cost tens of millions of dollars and may never come to pass. 

11

My colleague from Connecticut, my good friend—I love him, I revere him—he said we do not give them the extension for any longer 

than necessary? That is not true. We give it for whatever the Secretary of HHS wants to. And I for one do not have much faith that 

that will work out. The pharmaceutical industry, when they work 

against HHS, seems to always get their way. So that is number 

one. 

The second provision goes to something—and where I come from 

on this, Senator Burr, is along with Senator Gregg, Senator 

McCain, and Senator Kennedy, we authored the Generic Drug Act, 

the New Generic Drug Act that passed a couple of years ago and 

that has kept the price of generics low. So I care a lot about generic 

drugs. And the second provision allows companies to get years and 

years of patent time restored far beyond Hatch-Waxman. And, 

again, the way the countermeasures are defined in this bill, these 

patent extensions could be granted to blockbuster drugs already on 

the market, like antidepressants or drugs for stomach disorders. 

Take Prevacid. This is a drug to treat ulcers, which could easily 

be a side effect of treatment with a countermeasure or of people’s 

panic during time of attack. If the company made a slight tweak 

and got the drug approved as a countermeasure under the definition of this bill, which could fit, they could get 6 more years of patent protection worth $20 billion. 

Now, if for whatever political reason somebody wanted to help 

out the maker of Prevacid, we would allow them to do so. And paid 

for by whom? Not by the Senate, you know, the taxpayers as a 

whole, but by just the users of Prevacid. Why is that fair? I know 

we do not want to pay any more. That is the problem here. Nobody 

wants to spend more money on this, so let’s find another route. But 

when the drug people, the people who use these drugs find out that 

they are being taken advantage of to pay for a benefit for the whole 

society, they are not going to feel too good about it. 

What is worse about these patent extensions is because companies can get their entire patent restored after spending years after 

developing the drug, it actually removes any incentive to bring the 

drug to market quickly. 

Finally, S. 975 includes a provision that would waive the rights 

of the Government to spur further production of countermeasures 

in time of crisis. The waiver of the marching rights takes away the 

ability of the Government to intervene in easily foreseeable situations where a sudden surge in demand for a countermeasure overwhelms the ability of the company holding the patent. In other 

words, in this one, again, just—I mean, it seems that the pharmaceutical industry has almost written large parts of this bill. We 

want to give them money in the first part as an incentive to 

produce a much needed drug because we need the much needed 

drug. But when it is against their interests to produce the much 

needed drug, like it was with Cipro a few years ago, then we say 

we cannot do it. 

So it seems somehow in the pantheon of interests here we have 

it a little backwards. Instead of the need to get drugs out to market 

quickly when people need them, we take the needs of the pharmaceutical industry first. 

12

So if there are times of national emergency, we cannot let a patent stand in the way of saving American lives. We have to give recompense, no question about it. But we have to do that. 

So I think that these provisions are inappropriate for multiple 

reasons. Without saying anything negative about the need to do 

something here and about the idea of helping companies, encouraging companies to do it, just make the incentive proportionate to 

the reward that the society gets. Do not just leave it completely 

wide open. The reward is disproportionate to the investment put in, 

very possibly, depending on HHS and what they approve. A drug 

company that spends tens of millions or hundreds of millions of 

dollars developing a countermeasure which will already be compensated when the Government purchases the product could receive a multibillion-dollar windfall at the expense of the drug consumer. 

Second, they undermine existing patent law, which protects the 

rights of consumers to affordable pharmaceuticals. We know how 

much generic drugs save Americans, save the Government in Medicare and Medicaid. It accounts for 50 percent of the country’s prescriptions, 10 percent of the cost. Senator Hatch with Henry Waxman 20 years ago did a lot to protect the intellectual property of 

pharmaceutical companies, and I agree with that. They have to be 

rewarded. But, again, the reward should be proportionate. It is a 

balancing test, and the balancing test in this bill is out of whack. 

And, after all, as I mentioned earlier, it is not even clear that rewarding brand new products—that we are rewarding the brand 

new products that address the most dire threats. The definition of 

countermeasure could refer to many drugs that are already on the 

market. Again, you say, well, HHS will not do it. They have done 

other things that are even more egregious. Countermeasures are 

not only drugs that treat the direct effect of terror attacks; they 

can refer to drugs that treat secondary consequences of the attacks. 

So if a new vaccine produces a new negative side effect, I am all 

for providing appropriate incentives to ensure we have a drug to 

treat that side effect. But the language here is not drafted narrowly. As it is, we could end up shelling out money for migraine 

and antidepressant medications that are already on the market. 

So, Mr. Chairman, I propose we keep the thrust of BioShield, but 

that the patent-extending provisions be removed and be replaced 

with improved procurement procedures, coupled perhaps with some 

limited liability protections. I strongly believe we can bring companies to the table without needing to throw in unrelated windfalls 

whose costs cannot be predicted and that restrict the access of the 

American people to affordable prescription drugs. 

The President proposed cutting funding to bioterrorism preparedness grants. We cannot afford to spend billions of dollars that may 

never, ever lead to the availability of drugs needed to fight bioterrorism when we have not even spent the millions it would take to 

make sure the existing countermeasures can be delivered effectively. And I look forward to working with you—I am on the Finance and Judiciary Committees, which have some say over different parts of this, but your committee and all the others—to 

bring an effective bill that does not open the door for all kinds, as 

I said, of disproportionate reward and even boondoggles. 

13

Senator BURR. Senator Schumer, thank you very much. I feel 

compelled to give Senator Lieberman a rebuttal, but for the sake 

of time, if we can, I understand we are targeted to go to the floor 

with a vote, an up-or-down vote on Judge Dorr at about 10:50, 

10:55. It will not be a cloture vote. My hope is that we could spend 

15 minutes with some questions and answers if your time accommodates. 

Senator SCHUMER. I apologize, Mr. Chairman. I have some 

guests here in the back. I have to go see them. They have been 

waiting. 

Senator BURR. If Senator Lieberman has got the time, I would 

like to do that. 

Senator LIEBERMAN. I do. 

Senator BURR. Senator Schumer, I know that we have not had 

an active line of communication with your staff, but if you would 

so accommodate us as we move into these final stages. 

Senator SCHUMER. I would love that. 

Senator BURR. As I said prior to your appearance, we have not 

been given a good task, but we have been given an important task, 

and that is to try to assemble a bill that addresses all the concerns 

that we have. And those concerns are not limited just to the health 

concerns of an attack. It is the concerns that you have and others 

have about how we word it and what we extend. 

I will assure you that we will go through every scenario, explore 

every option. At the end of the day, whether I am trying to sell Joe 

on something that we have got in the final product or whether I 

am trying to sell you on something that you swore should not be 

there, ultimately I have got the responsibility to convince you. In 

the overall scheme of things, this was the only thing that we could 

do to accomplish the end goal. And I think that is the degree of 

detail we have gone into from a standpoint of looking at all of these 

issues that come up. 

Senator SCHUMER. Thank you. 

Senator LIEBERMAN. Mr. Chairman, if I can very briefly before 

Senator Schumer has to leave, I think it is very important that you 

try to engage us all in this. Look, I don’t think any one of us disagrees with this fact. The current BioShield I is not working. And 

the normal market mechanisms are not working to bring about the 

countermeasures we need to deal with bioterrorism or infectious 

diseases. So we have got to enter the market to create new incentives. That is what this bill would do. 

I take heart from the fact that Senator Schumer said he believes 

that there ought to be some liability protections. That is important. 

The other important part—I think there are three critical parts of 

S. 975: one is liability; the other is the tax incentives for companies 

to get involved; and we think the third is patent extension. And, 

obviously, we disagree but, look, the bottom line here is urgent 

threats require urgent solutions. And this is an urgent threat that 

keeps all of us awake at night. And I am just trying to figure out 

how do we create an adequate incentive to the biopharma industry 

to get them to put their considerable talent to work to come up 

with countermeasures. And one idea is to extend the patents that 

they have only if there is proof that the company has come up with 

a countermeasure that works. And what is the consequence? Some 

14

people will pay what they are paying now, not more—the patent 

will be extended. They will pay what they are paying now for whatever the drug is—Zocor, Prevacid, you know, Lipitor or whatever. 

They will pay what they are paying now for an additional period 

of time as determined by the Secretary of HHS. 

I really urge my friend from New York, maybe there is a way we 

can work together on some of the language involved here if you are 

concerned about it—and I hear you—the latitude that we are giving the Secretary of HHS is of concern. We could create clearer 

lines so that this is a possible incentive to give. 

Senator SCHUMER. I have not said that I am against all patent—

using the patent system. It may not be my preferred way, but I am 

willing to have give and take. But at least there have got to be 

some guards that you do not do $10 million maybe of needed investment for $1 billion of reward. 

Senator LIEBERMAN. Senator Burr, blessed are the legislative mediators. [Laughter.] 

Senator BURR. Senator, you partially answered my first question, 

and that was the three areas that you talked about: liability, intellectual property through patent extension, and tax credits, which 

you highlight in your bill. 

I understand you would not have them all in there if you didn’t 

think it was a package that was needed. 

Senator LIEBERMAN. Right. 

Senator BURR. But could you prioritize those three things for us 

from a standpoint of your understanding of their importance to accomplish that. 

Senator LIEBERMAN. That is harder for me. As you know, we 

have got an enormous number of incentives—I believe it is 29—of 

different kinds. So I have tried to prioritize by going to these three. 

And they affect firms of different sizes. I think the patent extension 

will probably be much more attractive and hopefully engage the big 

pharmaceutical companies. I think the tax incentives—we have an 

R&D limited partnership incentive, a special capital gains rate, 

and a new market credit for R&D partnership pass-throughs to investors that I think will be particularly appealing to smaller firms. 

I think the liability protection is going to be important to both 

large and small firms. 

So it is hard for me to choose among those three. I mean, clearly, 

I hope that we are going to find it possible to develop a consensus 

around the liability protection and the tax incentives. The patent 

extension is the most provocative and controversial, but, frankly, it 

may be the most effective to engender a real response here. 

Senator BURR. Do you possibly see a scenario, being empathetic 

of Senator Schumer’s position, where the patent extension for a 

company might exist only to the Federal purchases for the purposes of a threat situation? I think we are somewhat confident that 

we are not buying 100 percent of what we need were we to be attacked. A company having the right to come back and sell under 

BioShield a second or a third time without competition coming in, 

but they may not hold the patent if it has run out in the general 

market. Is that a possibility? 

Senator LIEBERMAN. Well, that is one of the alternatives that the 

Secretary of HHS has under the authority we give him in this bill. 

15

I myself am skeptical about whether that will be enough to engender the enormous investment that will be required from the 

biopharma industry to come up with some of the countermeasures 

we are talking about. But we should talk more about it. In other 

words, I do think as provocative as it is—you know, this idea of the 

patent extension came out of a lot of talks we had, people on my 

staff and other staffs, justified by the sense of urgency. What could 

we do to shake this up to get this extraordinary industry with its 

enormous innovational capacity that—let’s be honest about it, it is 

helping us live longer, better lives. We all criticize the industry, 

sometimes correctly because we are upset about pricing, for instance. But the fact is that the lives of all of us and our families 

are being extended by what they are doing. And the fact is they 

are not getting into this field because the market incentives are not 

enough for them. That is why we are looking at the patent extension. 

Senator BURR. Senator, would you agree that if we found a way 

to lessen the investment up front—research, development, clinical 

trials, that whole process—if the capital investment was less on the 

part of the companies, we can then moderate the back end as it relates to what is needed. 

Senator LIEBERMAN. That is an interesting thought. Possible. I 

mean, I think probably the most—I am not sure what you are 

thinking about because there is a balance there, and probably the 

most significant way we could do it is through tax incentives for 

up-front investments to diminish the impact on a company. And 

then I suppose you have the latitude to lessen somewhat the incentives further on down. 

This is a tough one because we are speculating about what will 

bring other people into this field that we urgently need them to get 

into and where what we have tried so far, BioShield I, has clearly 

not worked. I mean, to some extent we probably—and I know you 

have—should talk to the people in the industry directly, although 

I understand that there would be some skepticism about embracing 

every single word they say about what they need. 

Senator BURR. A broader question, and you alluded to this——

Senator LIEBERMAN. Incidentally—excuse me—I know Senator 

Schumer did not really mean this, but this bill was drafted by my 

staff and the staffs of Senator Hatch and Senator Brownback. 

Trust me, the biopharma industry had nothing to do with the 

drafting of this bill. 

I will say that the staff, particularly Chuck Ludlum, who has 

now retired to go to Senegal, he had a regular daily e-mail list that 

probably most people in this room and several hundred others were 

on. So people knew about what we were doing, but the drafting is 

ours. 

Senator BURR. Your bill creates a number of different things and 

a number of new offices in a number of different agencies. I am 

going to ask you a question I have asked everybody in the public 

arena, the private arena. 

Senator LIEBERMAN. Sure. 

Senator BURR. From a standpoint of bioterrorism and specifically 

the BioShield effort or biodefense effect, who should be in charge? 

16

Senator LIEBERMAN. Well, ultimately I think the Secretary of 

HHS has to be in charge. I mean, there are some parts of this that 

the Department of Homeland Security will have, naturally, and 

they have got to work together. 

I had an interesting conversation with Secretary Chertoff the 

other day about the extent to which he is now working, he thinks, 

better and with clearer lines with Secretary Leavitt at HHS. 

But——

Senator BURR. Would you agree that there needs to be somebody 

named in charge of this effort? 

Senator LIEBERMAN. I do, and particularly insofar as the focus 

here is on incentivizing the biopharma industry to produce the 

countermeasures we need to protect the lives of the American people from a bioterrorist attack and infectious diseases. And that certainly seems to me to fall most naturally under the Secretary of 

Health and Human Services. 

Senator BURR. You have been here for several years and are very 

familiar with HHS and NIH and CDC and how they work. Do we 

have a cultural problem with what we are trying to do? Do we have 

a need that may not culturally fit into how those agencies currently 

operate? Would you like to comment on that? 

Senator LIEBERMAN. Well, it may be. I mean, I will say that 

there is a judgment being made here, the proposal we are making, 

which is that we are not going to get what we need for our country 

in terms of meeting this threat with what might be called a kind 

of big bureaucracy, command and control, frankly, Department of 

Defense-type system where we are going to buy everything. We 

think that will not work quickly enough, and it will end up costing 

us more than it should. And so far the attempt to put into effect 

in BioShield I has not worked. This is a very different cultural 

model. You are absolutely right. This is a model that says let’s create—let’s enter the market, as I have been saying. Let us, through 

Government, create the incentives for private capital to come in 

and get this job done. Using private innovation, which is one of the 

great strengths of our country, and let us get it done at a much 

lower cost to the taxpayers. 

Now, I am not concealing anything here. It could be that one of 

the costs associated, as I said before, is that some people on certain 

prescription drugs are going to end up paying the same that they 

do now, because the patent is going to be extended for 6 months 

or a year or whatever. 

Senator BURR. You surprised me when you said that BioShield 

has not worked. Most are not as bold to answer that. I think the 

jury is still out in many people’s minds. I would happen to agree 

with you. 

Senator LIEBERMAN. Well, yes, I think maybe I should amend it 

simply by saying that we do not see it working yet. 

Senator BURR. As robustly as had been——

Senator LIEBERMAN. Yes. And I understand, and there are some 

responses to this in our proposal that some of it seems to be cultural and bureaucratic. At least that is what the people on the outside say. But I think it goes beyond that, that basically, you know, 

the incentives that we put out, the system we created for the contract and pledged to buy is just not enough. 

17

Senator BURR. In your conversations, would you agree that the 

procurement process as designed has been a difficult process for individuals who considered entering into BioShield to understand? 

Senator LIEBERMAN. Absolutely. That is what we hear. That is 

what independent reviews of what has happened so far have told 

us. And that, no matter what else we do, is something that we 

ought to try to fix. But it also—though this stuff is mostly entrepreneurial, innovational, it could end up being bureaucratic, too. It 

could end up being slowed up bureaucratically if the system does 

not change the culture. 

Senator BURR. Last question, and then we can both go vote. 

Given your view of not just your legislation but what we need to 

accomplish, if you could describe what success would be at the end 

of this process, what would it be? 

Senator LIEBERMAN. Well, it would be a bill, a law that will 

quickly bring the power of innovation and entrepreneurship of the 

American biopharma industry to finding countermeasures for bioterrorist attacks and infectious diseases. And I think it has got to 

include extensions of—liability protection, tax incentives, and, I believe, some kind of patent extension. 

You know, Senator Hatch said it. We all live with this fear that 

everybody can pick away at our proposal. Senators Hatch, 

Brownback, and I intentionally went out further than conventional 

legislation, because this is not a conventional threat. And Senator 

Hatch said it. You can pick away at this now, but God forbid we 

come to the day when there is a bioterrorist attack or a terrible 

pandemic flu in this country, 535 Members of Congress are going 

to say, ‘‘Well, why didn’t we do something more, quicker?’’ And so 

I think what I would say success would be is if we do something 

more, quickly, than BioShield I. 

Senator BURR. Senator, again, I thank you. This morning when 

I got the e-mail that potentially the Tubes in London had been attacked again, my initial thought was, Boy, this one may be a bio 

attack. Maybe that means I need to get this bill done. I have been 

working on this too long. I think that probably went through the 

minds of a lot of folks who have sat down with your staff, with you, 

with my staff, who really have conveyed the sense of urgency that 

they have about the need to get this bill out there, to get BioShield 

in a functional capacity and to do it quickly. 

The amazing thing—and I hope that Senator Schumer’s staff will 

convey this to him—is everybody that I have met with for the past 

6 months as it relates to this effort has been incredibly helpful. 

Even the ones that may have had much different approaches than 

you or than I might have, they have been very patient to listen to 

new ideas. 

There has not been an entity—and that includes the big pharma, 

small pharma, bio device world. Nobody seems to have been in for 

selfish reasons. I think there is a frustration by big pharma, a frustration that is driven by how their businesses are traditionally 

modeled, and the fact that they have shareholders and the incredible Catch-22 that Sarbanes-Oxley potentially puts them in when 

they cannot justify to their shareholders anything other than a 

profitable venture, which means if you have got a choice between 

sticking in the private marketplace with patented drugs versus 

18

going over here and accepting liability and potentially not knowing 

what the time line is, and quite honestly in BioShield procurement, 

not knowing until very late in the process exactly what the dosage 

procurement is going to be. 

Senator LIEBERMAN. Right. 

Senator BURR. It makes it pretty tough for a publicly traded 

CEO. So this is not something that big pharma has been engaged 

in. The great thing is that we have a very innovative community 

out there that wants to participate. From a standpoint of myself, 

I think I agree with you. Our effort is to see how many—big 

pharma, small pharma, bio, everybody—that we can get involved in 

this. My hope is that over the next 30 days we will have that blueprint that we can work in a partnership to try to refine and address as many of the issues that we all are passionate about as we 

possibly can. I thank you. 

Senator LIEBERMAN. Thank you, Mr. Chairman. Again, you can 

really make this happen, and, of course, we start with Senator 

Frist being focused on this. What my hope would be is that you 

bring a bill out this fall and we get to passage through the Senate 

before the end of the year. It is just that urgent. 

You know, your reaction to what happened in London today is 

not a hallucination. I mean, look, we saw what happened in the 

Japanese underground system some years ago. I remember the 9/

11 Commission said that part of why 9/11 happened was a failure 

of imagination. What they clearly meant is that we could not imagine prior to 9/11 that people would actually do what those fanatics 

did to us on 9/11. And now we just have to imagine what others 

like them might try to do and make sure we are ready. That is exactly the mission that you have accepted. I thank you for it, and 

I pledge my full support to you as you go forward. 

Senator BURR. Thank you once again, Senator. 

[Additional material follows.]

19

ADDITIONAL MATERIAL

PREPARED STATEMENT OF SENATOR KENNEDY

I commend Chairman Burr for his leadership on our subcommittee. He has given us an effective start, and I commend him 

for the impressive pace he has set. 

I also commend Chairman Enzi for his leadership and his strong 

commitment to biodefense issues, as well as two distinguished 

former chairmen of our committee, Senator Gregg and Senator 

Hatch. 

Senator Gregg moved the first BioShield bill through our committee last year. He is the lead sponsor of one of the bills, S. 3, 

we are discussing today. 

Senator Hatch and Senator Lieberman are the lead sponsors of 

the proposal, S. 975, and I join in welcoming them to today’s discussion. 

I look forward to our discussion about the measures we need to 

take improve our biodefense capability and public preparedness. 

The barbaric attacks in London 2 weeks ago remind us again 

that we’re still highly vulnerable to terrorist attacks, and must 

never relent in our efforts to protect the safety and health of the 

American people. We’re fighting the terrorists overseas, but we 

can’t neglect the real possibility that they can strike us at home 

again, and we clearly haven’t done enough to respond to that 

threat. 

A year ago today, we took a significant step in protecting our citizens by enacting BioShield. This bipartisan legislation moved the 

ball forward, most significantly by providing dedicated funds to 

purchase countermeasures, and establishing a process to assure 

biotech companies and pharmaceutical companies that the Government will purchase the biodefense products they produce if they 

protect our national security. 

I believe additional action is needed. I’m hopeful we can work together to pass a BioShield II bill that will further improve the Nation’s ability to respond to a bioterrorist attack. 

One goal is to fully engage the biotech and drug industries, 

which are not yet adequately engaged in the search for vaccines 

and drugs to keep us safe. In a sense, these industries are like the 

defense contractors that do an outstanding job in providing equipment and materials needed to protect our security in other ways. 

We treat these contractors fairly in building up an arsenal of weapons, and we must treat other industries fairly in building up our 

biodefense arsenals. 

One proposal is to offer liability protections to these companies. 

A case can be made for such protections, coupled with a compensation program to encourage vaccinations against infectious bioterror 

agents or even pandemic flu. We must be careful not to create 

broad protections for companies that are negligent, simply because 

products have value for biodefense. Liability protections are more 

questionable for products brought to market for a biodefense use 

that also have a strong commercial use. 

On the defense contractor analogy, we should also consider a 

greater role for the Government in the production of countermeasures using direct Federal funding by contracts or through a 

20

Federal production facility. Tax incentives are an additional idea 

well-worth considering. 

Increased patent protections or extended market exclusivity are 

less appropriate for products that have a traditional commercial 

use. The idea of a patent extension on a product unrelated to a 

countermeasure, as in the so-called ‘‘wild card’’ patent extension, is 

an unacceptable way of shifting the cost of countermeasures to the 

health system when current health costs are already 

unsustainable. 

Patent extensions for products that have a strong commercial 

use, even if they also have a biodefense use, would impose unnecessary costs on the health system. The Government should fund 

these costs directly, through appropriations, and not shift the costs 

onto private payers or other Government programs, such as Medicare or Medicaid. 

Public health infrastructure is another area that needs our immediate attention and equal priority with the development of countermeasures. Just as we support our armed forces in Iraq, we 

should support our front line defenses against bioterrorism at 

home—our public health and medical professionals. 

State and local health agencies and laboratories are underfunded, understaffed, and poorly equipped to respond to the threat. 

Law enforcement officials are worried too—with good reason—that 

they’re not adequately equipped to prevent and respond to terrorism. What good are countermeasures if we don’t have the public 

health capability to detect an attack and administer treatments? 

We need to do more to protect our citizens. 

Information technology is another indispensable part of preparedness. Electronic health records allow real-time tracking of disease outbreaks, so that early responses can be made effectively. 

Rapid detection of a bioterrorist attack or a new epidemic can 

mean the difference between a local outbreak and a national disaster. 

Our health defenses against biological attacks need to be as 

strong as our military defenses. The Bioshield Act was a significant 

step in providing greater protection for Americans, but we obviously have much more work to do. I look forward to working with 

the committee to strike the right balance. 

Senator BURR. The Roundtable is adjourned. 

[Whereupon, at 11:10 a.m., the Roundtable was adjourned.] 

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